All contractors supplying the Town Hall with essential services, supplies, maintenance and construction work must now pay their workers the minimum £8.30-an-hour London Living Wage.

The boost for low-pay workers is costing a cash-strapped Tower Hamlets £47.5 million on top of the £29m currently being budgeted for—and includes current contracts.

The move was revealed by Mayor Lutfur Rahman at the annual assembly of Telco, The East London Communities Organisation, held at Stepney’s Troxy venue, and is due to be discussed at next Wednesday’s council cabinet.

“I’m extending the Living Wage to all our contracts,” he told the packed assembly. “We’re giving the London Living Wager top priority.”

The Living Wage Campaign launched by Telco in 2001 calls for every worker to earn enough “to provide their family with the essentials of life.”

It’s first success came in 2005 when banks at Canary Wharf agreed to improve pay for their cleaners, maintenance and catering staffs.

The campaign went nationwide and has won £70m so far to lift 10,000 families in Britain out of working poverty.

Tower Hamlets became the first local authority to sign up to the rate for its employees four years ago.

But from now on, commercial firms also have to pay the Living Wage—if they want Town Hall business.

Mayor Rahman told the Advertiser: “We’re finding extra cash to get more out of our contracts, so that suppliers can’t tell us they can’t afford to pay the rate.

“We’re having to tighten our belts to do it—but it means reducing poverty in the East End and putting money in people’s pockets.”

The Living Wage is set each year by the GLA, calculated on London’s soaring cost-of-living. It increased 5.7 per cent in October on last year’s rate—and 24 per cent since being introduced in 2005.